The Restart Grant scheme to help businesses reopen safely as COVID-19 restrictions are lifted has been launched with confirmation grants will be available from 1 April 2021 but applications can be submitted in advance

Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council.

Businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council.

There are a number of eligibility criteria, including that the business must be based in England and was trading on 1 April 2021, pays business rates, operates in the non-essential retail, hospitality, accommodation, leisure, personal care or gym sectors.

Funding is not available if a business is in administration, insolvent or has been struck off the Companies House register, and has exceeded the permitted subsidy allowance.

Subsidy allowance

This scheme is covered by three subsidy allowances:

• Small Amounts of Financial Assistance Allowance – you’re allowed up to £335,000 (subject to exchange rates) over any period of three years;
• Covid-19 Business Grant Allowance – upper limit of £1.6m;
• Covid-19 Business Grant Special Allowance – if you have reached your limits under the Small Amounts of Financial Assistance Allowance and Covid-19 Business Grant Allowance, you may be able to access a further allowance of funding under these scheme rules of up to £9m, provided certain conditions are met.

Grants under these three allowances can be combined for a potential total allowance of up to £10,935,000 (subject to exchange rates).

Local councils will use their discretion to determine whether businesses meet the eligibility criteria for this grant scheme.

Businesses will have to apply for the one-off grants via local councils.

The grants are tapered depending on local business rate levels. Businesses appearing on the local rating list with a rateable value of exactly £15,000 or under on 1 April 2021 will receive a payment of £2,667.

Businesses with a rateable value over £15,000 and less than £51,000 on 1 April 2021 will receive a payment of £4,000.

Businesses with a rateable value of £51,000 or over on 1 April 2021 will receive a payment of £6,000.

The Restart Grant will also support hospitality, accommodation, leisure, personal care and gym business premises with one-off grants of up to £18,000 in Strand Two of the Restart Grant.

This funding will be a one-off lump sum payment from 1 April 2021. Local authorities will be responsible for delivering the funding to eligible businesses.

Grant income received by a business is taxable. The Restart Grant will need to be included as income in the tax return of the business. Only businesses that make an overall profit once grant income is included will be subject to tax.

Payments made to businesses before 5 April 2021 will fall into the 2020/21 tax year. Payments after 6 April 2021 will fall into the 2021/22 tax year. Unincorporated businesses will be taxed when they receive the grant income.

Local authorities are required to undertake prepayment checks for all Restart Grant payments. This is a stricter position than that taken for previous Covid-19 business support grant schemes. These checks are required to be undertaken before any payments are issued to businesses, and can be commenced in advance of 1 April 2021. This requirement is not limited to new applicants and should look at both the company and the company’s bank account.